The design and build concept in construction contracts places responsibility for both the design and construction of a project under a single construction firm. Under this approach, the contractor and architect work together under the construction firm’s management and are responsible for the project from its initial concept through design, construction, and final completion.
The construction firm may provide design services in several ways. It may use its own in-house design team, operate a subsidiary design firm, or hire an independent architectural and engineering firm to perform the design work. Regardless of the structure, the firm is responsible for coordinating and managing both the design and the build phases.
One important feature of contractors design and build coverage is that it can include professional liability protection for the construction firm that performs, manages, or subcontracts design services. This helps address claims that may arise from design errors, omissions, or professional negligence that lead to financial loss, property damage, or project delays.
What is Contractors Design and Build (Project Managers)?
Contractors Design and Build (Project Managers) coverage is a specialized form of insurance intended for firms that handle both project management and design-build responsibilities. It recognizes that when a contractor or project manager oversees the design as well as the construction, they take on additional professional liability exposures beyond those of a traditional contractor.
This coverage is designed to respond when a client alleges that a mistake in design, coordination, or professional advice caused a loss. It helps protect the business and its assets while supporting the continuity of the project.
Who needs it
- General contractors offering design-build project delivery
- Construction firms that employ or subcontract architects and engineers
- Project managers overseeing both design and construction phases
- Developers that coordinate design services as part of a turnkey project
- Firms entering contracts that require proof of design and professional liability coverage
What it typically covers
While every policy is different, Contractors Design and Build (Project Managers) coverage may include:
- Professional liability for design services, including alleged errors, omissions, or negligent acts
- Third-party claims for financial loss related to design or project management services
- Defense costs associated with covered claims, subject to policy terms
- Coverage for subcontracted design professionals, when included in the policy wording
- Project management liability tied to coordination, scheduling, and oversight of design and construction
Common exclusions and limitations
Policies often include exclusions and limitations such as:
- Known defects or issues that existed before the policy started
- Intentional, fraudulent, or criminal acts
- Contractual guarantees or warranties beyond standard industry obligations
- Work or services outside the scope of professional design or project management
- Certain types of property damage or bodily injury that may be covered under other policies, such as general liability
Actual coverage, exclusions, and limits depend on the specific policy and insurer. Always review your policy documents to understand what is and is not covered.
Factors that influence cost
The cost of Contractors Design and Build (Project Managers) coverage can vary based on several factors, including:
- Size and revenue of the construction or project management firm
- Types of projects handled (residential, commercial, industrial, infrastructure)
- Scope and complexity of design services provided
- Claims history and risk management practices
- Coverage limits, deductibles, and optional endorsements selected
Proof of insurance and compliance
Project owners, lenders, and public agencies often require proof of professional and design-build coverage before work begins. Certificates of insurance can help demonstrate that a contractor or project manager carries appropriate limits and types of coverage. Requirements vary by contract, project type, and jurisdiction, so it is important to review each contract and consult with an insurance professional when needed.
How to get a quote
To explore Contractors Design and Build (Project Managers) coverage tailored to your firm’s project mix and risk profile, you can request a customized insurance quote online. Get a quote to compare options and limits that fit your business.
Related Coverages
Frequently Asked Questions
How is design and build coverage different from general contractors liability?General contractors liability typically focuses on bodily injury and property damage arising from construction activities. Design and build coverage adds professional liability protection for design and project management services, such as errors or omissions in plans, specifications, or coordination. Does this coverage replace architects and engineers professional liability insurance?No. It is not a full replacement for an architect’s or engineer’s own professional liability policy. Instead, it is designed for contractors and project managers who assume design responsibilities or hire design professionals as part of a design-build contract. Are subcontracted architects and engineers covered under my policy?Some policies can extend coverage to subcontracted design professionals, but this is not automatic. The policy terms must specifically include such coverage, and insurers may require contracts and qualification standards for those subcontractors. Is coverage required by law for design-build projects?Requirements vary by state, municipality, and project owner. Many public and private contracts require proof of professional liability or design-build coverage, even if it is not mandated by statute. Always review contract insurance requirements carefully. What information do I need to apply for Contractors Design and Build coverage?Insurers typically ask for details about your business operations, types of projects, annual revenue, design services provided, use of subcontracted professionals, and any prior claims or losses. This helps them assess your risk and structure appropriate coverage options.
Still have questions? Talk to a local insurance expert.
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